The European Bank for Reconstruction and Development (EBRD) is providing Bank Lviv with a financing package consisting of a EUR7.5m guarantee to cover the risks of new lending of up to EUR30m and a hryvnia loan equivalent of up to EUR15m of private micro, small and medium enterprises (MSME) financing.
“The loan is divided into two tranches – EUR10m committed and EUR5m non-dedicated, each maturing in three years – will help Bank Lviv maintain a sustainable and diversified funding base to ensure continued access to medium-term financing for businesses,” the bank said in a statement on Thursday.
It is indicated that the cost of financing the loan will be reduced by subsidizing the interest rate in local currency within the framework of the European Union’s EU4Business initiative in Ukraine.
According to the release, an unsecured risk-sharing instrument worth EUR7.5m will also be provided in two equal tranches, each of which will cover 50% of the credit risk of new loans of Bank Lviv totaling up to EUR30m, but not more than 50% of the portfolio. The facility will help Bank Lviv provide access to finance for Ukrainian companies operating in critical sectors such as primary agriculture and agricultural services, food processing, transportation and logistics, retail and pharmaceuticals, the EBRD said.
It added that up to a further EUR4.5m of this total portfolio of EUR30m will support long-term investments by private MSMEs in EU-compliant clean technologies. Eligible sub-borrowers will also receive EU-funded technical assistance and investment incentives upon completion of their investment projects.
The EBRD recalls that the project is made possible by a 50% first loss risk coverage by donors.
As reported, the relevant project was approved by the board of directors of the international bank on July 18, and the necessary documents were signed on Thursday.
The EBRD recalls that Bank Lviv, owned by European shareholders, is a regional SME-oriented bank and one of the fastest growing in western Ukraine: its loan portfolio grew from $35 million in 2017 to $133 million in the first quarter of 2023. Its head office is located in Lviv, and its network includes 19 branches, 13 of them in Lviv region and six in other cities.
According to the National Bank of Ukraine, as of the beginning of June 2023, Bank Lviv ranked 27th (UAH 8.25 bln) among 65 banks operating in the country in terms of assets.
According to the information on the website of Bank Lviv, its shareholders at the beginning of this year were: ResponsAbility Participations (Switzerland) – 48.557189%, Nordic Environment Finance Corporation (NEFCO) – 13.93623% and Icelandic citizen Margeir Peturson – 37.4692%.
The Nordic Environment Finance Corporation (NEFCO) has become a new shareholder of Bank Lviv, which operates mainly in the western region of Ukraine, with a 13.94% stake in the charter capital.
“With this investment, Bank Lviv continues to be a 100% foreign-owned bank. The largest shareholders are the Swiss responsAbility (48.56%) and Margeir Petursson (Iceland, 37.47%).
“We are happy to welcome NEFCO to Bank Lviv as a shareholder. Besides the investment, NEFCO will help strengthen Bank Lviv’s focus on sustainable environmental and social finance. Our international shareholders believe in Ukraine and seek a positive impact through direct investments in the bank’s capital. I am certain that NEFCO’s experience and expertise in green financing will support Bank Lviv’s development as a modern and sustainable bank,” Ashot Abrahamyan, the chairperson of the Bank Lviv management board, said.
“Bank Lviv’s strategy, our previous cooperation and the engagement and ownership of other professional impact investors encouraged us to invest in the bank. NEFCO and Bank Lviv share the same goal of accelerating the green transition and we believe that our participation will help the bank achieve its goals of sustainable and responsible banking. Bank Lviv is close to its customers, provides good service and aims to promote sustainable businesses practices and make a positive impact on the economy. The bank’s sustainable growth potential motivates us, and we are looking forward to continuing our cooperation with the Bank Lviv team,” Thor Thorsteinsson, the Vice President for Nordic SMEs at NEFCO, said.
“Bank Lviv is one of the fastest growing banks in Western Ukraine, and the leading micro and SME lender in the region. During last three years, the bank’s loans increased by 45% and deposits by 30% annually. One of the top 30 banks in Ukraine, Bank Lviv operates through 19 branches in Western Ukraine and Kyiv,” the report says.
“NEFCO, the Nordic Green Bank, is an international financial institution that finances the initial scale-up of Nordic green solutions on global markets. Founded in 1990 by the five Nordic countries, NEFCO has already financed and implemented over 1,500 projects in energy efficiency, renewable energy, clean water and sanitation, waste management, and cleaner industrial processes, among others. We serve the interests of our owners, Denmark, Finland, Iceland, Norway and Sweden, and work with concrete actions to accelerate the green transition,” according to the document.
The European Bank for Reconstruction and Development (EBRD) has provided a four-year loan of EUR7.5 million to Bank Lviv for lending to small and medium-sized enterprises (SME) under the EU4Business program, Anton Usov, the EBRD senior adviser on external affairs, has said.
“Small and medium-sized enterprises in western Ukraine will benefit from a new loan of up to EUR7.5 million to Bank Lviv provided under the EBRD EU4Business credit line. The loan will be available for disbursement in the Ukrainian hryvnia, which will protect Bank Lviv’s borrowers from foreign currency-related risks, and offer long maturities,” the EBRD noted.
“The funds are provided in the context of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the European Union (EU) and Ukraine. EU grants will be offered as investment incentives to eligible enterprises to reduce the cost of their capital expenditure on upgrades of technology and production processes to comply with EU standards and regulations,” it said on its website.
Bank Lviv is a regional bank providing banking services to SMEs and private clients across western Ukraine. It is well established in Lviv, Ivano-Frankivsk, Lutsk, Rivne, Ternopil and Uzhgorod regions, as well as Kyiv.
The EBRD is a leading institutional investor in Ukraine and to date has committed more than EUR14.54 billion in over 460 projects to the country.
The European Bank for Reconstruction and Development (EBRD) will provide Bank Lviv (Lviv) with funding in the amount of EUR5.3 million under the Women in Business program for lending to companies led by women and for the development of trade, according to a press release from the EBRD.
According to the report, the financing package will consist of a four-year loan of up to EUR4.3 million, which is provided in the hryvnia, for lending to micro, small and medium enterprises under the guidance of women. The Women in Business program provides for the provision of consulting services for women entrepreneurs. The program also includes technical assistance to financial institutions to improve service in companies led by women.
In addition, the EBRD financing package includes a limit opened to Bank Lviv in the amount of EUR1 million under the EBRD’s Trade Facilitation Program (TFP) to stimulate international and regional trade.
PJSC Bank Lviv has attracted funding from Triodos Investment Management (Netherlands) in the amount of EUR 5 million, the bank said on its website. “Dutch-based company Triodos Investment Management through its inclusive financial funds, namely Triodos Microfinance Fund and Triodos Sustainable Equity Fund, provides a credit line of EUR 5 million to Ukraine’s Bank Lviv. This line will strengthen the bank’s position in the credit financing of domestic micro and small businesses and the agrarian sector,” the report says.
Triodos Investment Management is a subsidiary of Triodos Bank.
As reported, this autumn Swiss-based asset management company responsAbility Participations AG (Zurich) acquired a 40.45% stake in Bank Lviv.
Bank Lviv was registered in 1991.
Bank Lviv ranked 39th among 82 banks operating in the country as of October 1, 2018 in terms of net assets (UAH 2.024 billion), according to the National Bank of Ukraine.
The National Bank of Ukraine (NBU) has approved the acquisition of 51% of shares in public joint-stock company Bank Lviv by Switzerland’s responsAbility Participations AG, the asset management company. The NBU said on its website that the decision was made on June 23.
Bank Lviv earlier reported that the package of documents to approve the acquisition by the new strategic investor was submitted on September 12, 2017.
Bank Lviv was registered in 1991. Its ultimate beneficiary holding over 99.9% of shares was citizen of Iceland Margeir Petursson.
The bank ranked 44th among 84 operating banks in terms of assets as of January 1, 2018 (UAH 1.938 billion), according to the NBU.
According to a posting on the website of responsAbility Participations, 60% of its shares belong to Swiss financial institutions, including Baumann&Cie, Raiffeisen Switzerland, Swiss Re Foundation, Vontobel Beteiligungen, 21% – to private investors and 19% – to managers and employees.
The core business of responsAbility Participations is investment in developing markets.
